However, this is changing fast: strong demand for infrastructure, a shortage of skilled labor, and increased stakeholder pressure for data transparency and integration are all accelerating digital adoption. As a result, the AEC tech ecosystem has experienced an explosion of investment and a wave of start-up launches. An estimated $50 billion was invested in AEC tech between 2020 to 2022, 85 percent higher than the previous three years.
On May 17, 2023, McKinsey’s Global Infrastructure Initiative (GII) hosted a roundtable discussion with 50 tech companies, AEC firms, and VC/PE investors to debate how we can capitalize investment momentum to accelerate industry transformation that will enable building the next generation of infrastructure, while helping decarbonize our existing assets. Many topics were discussed and debated at the roundtable, but four clear themes emerged:
- Ambition levels are high. Participants were not focused just on digitizing the industry but transforming it. Investors, tech companies, and AEC players alike are excited about changing the industry structure, with different value pools and different kinds of organizations emerging. However, it is probably not possible for the industry to disrupt itself—rather we need to mobilize private capital and other resources to disrupt faster.
- Collaboration is still key. To accelerate, we need to move from a project-centric approach to an enterprise approach—one of the factors holding back adoption is the fragmentation of technology across organizations, and the impact this has on costs and digital capability building. Furthermore, we need to go further to share data between organizations and between projects—this does not mean giving away commercially sensitive “crown jewels”, but rather sharing data that allows everyone to capture additional value.
- Focus on functionality. In general, we have a way to go to improve User Interfaces (UI) and User Experience (UX) in AEC tech. Currently, tools take a long time to master, and adoption can be slow. We should learn from gaming and other industries to simplify tools without reducing sophistication and ease integration between platforms and tools. We should embrace AI (particularly large language models) to simplify the way users interact with digital tools.
- Crack the code with SMEs. Most construction work is delivered by small and medium-size enterprises (SME). As an industry we need to keep driving low-cost, intuitive tech that will improve productivity for very small businesses. Adoption must extend to the frontline, with solutions tailored to meet their precise needs.